Wednesday, October 28, 2009

Multinationals shift losses, as well as profits

From the Guardian:"At present, UK tax law allows a company to carry legacy losses forward indefinitely until it has made the same amount in profits, avoiding tax on any earnings in the interim. The rule has raised fears Britain's banks could avoid paying tax for decades. Merrill Lynch, for example, booked £13bn of credit crunch losses through its London offices last year."

Let's hope that the UK pre-budget report, due out shortly, will take steps to address this.

1 Comments:

While it is appealing on a short-term basis to cut M-L's loss carryforward, consider the long term consequences to businesses, society, and employment when governments take a rake off the top in the good years and make the losses unrecoupable for the bad years.

Maybe we should talk to an economist about this. They have the ability to analyze these problems, free (most of the time) from political bias.

But preferably talk to one economist, because if you talk to two, you'll have three conflicting opinions. :-)

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The Tax Justice Network (TJN) is an international, non-aligned network of researchers and activists with a shared concern about the harmful impacts of tax avoidance, tax competition and tax havens.
www.taxjustice.net